Lloyds Banking Group has set aside another £1bn to cover the cost of insurance mis-selling and the treatment of mortgage customers.
Another £700m will cover payment protection insurance (PPI) claims and £283m will be used to repay about 590,000 mortgage holders.
The repayment to mortgage customers comes after they were charged from 2009 to 2016 for going into arrears.
The Financial Conduct Authority had been investigating the issue, concluding that the charges should not have been applied as the bank did not always do enough to understand customers’ circumstances and check that their arrears payment plans were affordable and sustainable.
Lloyds will refund all fees charged for arrears management and broken payment arrangements, and it will also pay any litigation fees that were applied unfairly to customers who were involved in related legal action.
In addition, it will also offer payments for potential distress and inconvenience.
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